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The twin effects of globalization, Volume 1
Author:Daveri, Francesco; Manasse, Paolo; Serra, Danilo; Country:India;
Date Stored:2003/11/19Document Date:2003/10/01
Document Type:Policy Research Working PaperSubTopics:Labor Policies; Economic Theory & Research; Private Participation in Infrastructure; Environmental Economics & Policies; Small Scale Enterprise; Microfinance
Language:EnglishRegion:South Asia
Report Number:WPS3154Collection Title:Policy, Research working paper ; no. WPS 3154
Volume No:1  

Summary: Employees of "globalized" firms face a riskier, but potentially more rewarding, menu of labor market outcomes. The authors document this neglected tradeoff of globalization for a sample of Indian manufacturing firms. On the one hand, the employees of firms subject to foreign competition face a more uncertain stream of earnings and riskier employment prospects. On the other hand, they enjoy a more rapid career growth and have more opportunities to train and upgrade their skills. The negative uncertainty costs and the positive incentive effects of globalization are thus twin to each other. Concentrating on just one side of the coin gives a misleading picture of globalization.

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